Israeli Diamond Billionaire to Gain Stake in Greek Real Estate

Banking source say Beny Steinmetz’s BGS Real Estate is taking part in the acquisition of Pangaia, the National Bank of Greece’s real estate arm.

Private equity firm Invel Real Estate, together with Israeli businessman Beny Steinmetz’s BGS Real Estate and other investors, is close to buying a majority stake in Greek real estate company Pangaia, two bankers close to the deal told Reuters.

The stake is currently owned by National Bank of Greece, the country's largest lender. “The agreement will close in the next 10 days. Invel will acquire about 66 percent of Pangaia for more than 600 million euros [$808 million],” one of the bankers said.

Invel will pay part of the purchase price in cash, contribute equity in the form of real estate and finance the rest with a loan from National Bank, the bankers said. Dutch-based Invel was set up in March to take advantage of opportunities in the European real estate market by offering investors the ability to co-invest in deals.

Steinmetz, whose BSG Real Estate will be one of the co-investors in Pangaia , is best known in Israel as a diamond miner and trader.

“NBG will retain management control at Pangaia for five years,” one of the bankers said. “The loan by NBG for part of the majority stake will be at a spread of 275 basis points, secured by real estate contributed by Invel.”

Pangaia’s real estate portfolio includes office buildings, branches operated by National Bank and other property recently acquired from the country’s privatization agency. Pangaia may pursue a listing on the Athens stock exchange by 2015, one of the bankers said.

The agreement has been approved by the Hellenic Financial Stability Fund, the bank rescue vehicle that recapitalized the country’s big four banks in the summer and is now their major shareholder, one of the bankers said.

Last month, Canadian firm Fairfax Financial Holdings announced its intention to raise its stake in Greek real estate firm Eurobank Properties.

Bloomberg
Moti Kimche